Mexico's pro-industry unions undermining workers' rights

U.S. organized labor offers support to stop 'race to the bottom'

MEXICO CITY – During a 5.6-magnitude earthquake, Eduardo Vargas rose
from his cubicle at the Atento call center in Mexico City and tried to
evacuate the swaying building.

He didn’t get far. Vargas said supervisors blocked the exits and ordered panicked Atento employees to keep working.

Although no one at the call center was hurt, the shoddy treatment
prompted Vargas and a few dozen co-workers to join the Mexican Telephone
Workers Union to press Atento to raise their dollar-per-hour wages and
improve working conditions. But to their surprise, they learned that
they already belonged to a union.

That’s because when they were hired by Atento, which is owned by the
Spanish telecommunications giant Telefonica, they unwittingly signed up
for a pro-business union that works in cahoots with the company to
suppress wages and maintain a docile labor force.

Under Mexican law, the union with the most members — in this case, the
official Atento union — controls contract negotiations. As a result,
Vargas and other employees who defected to the more militant Telephone
Workers Union had no bargaining power.

The Atento case, which has turned into a cause célèbre for labor
activists in the United States and Europe, is a prime example of the
power and omnipresence of company unions that help employers in Mexico
minimize costs and stand firmly in the way of workers as they try to
boost their wages and working conditions. Nearly all unions in Mexico
“protect the patron and not the worker,” said Maria Xelhuantzi Lopez, a
political science professor at Mexico’s National Autonomous University.

She’s not exaggerating.

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About 10 percent of Mexico’s labor force carries union cards but nine
out of every 10 members belong to secretive and undemocratic
pro-business unions, Xelhuantzi-Lopez said. Thus, she estimates the
proportion of Mexican laborers who belong to real unions that fight for
their rights at about 1 percent which would represent one of the lowest
unionization rates in the world.

In Mexico, sham worker syndicates are known as “protection unions.”
Their leaders, who often receive kickbacks, negotiate secret deals with
company bosses designed to shield businesses from strikes and worker
demands for substantial increases in wages and benefits. These
agreements, in turn, are known as protection contracts.

Protection unions and contracts are illegal in the United States.
However, about 60 percent of the foreign multinational companies
operating in Mexico are U.S. firms and “virtually all of them benefit from
protection contracts,” said Robin Alexander, director of international
labor affairs for the U.S.-based United Electrical, Radio and Machine
Workers union.

Like Vargas and the other Atento employees, most Mexican workers are
unaware they belong to protection unions because these unions don’t
collect dues while union leaders have almost no contact with the labor
forces they nominally represent.

They also try to hoodwink workers by employing belligerent,
power-to-the-people language when, in fact, workers receive the bare
minimum, said Carlos de Buen, a Mexico City labor lawyer. For example,
if a business is required by law to pay workers two-week bonuses, a
protection contract might state: “Under no circumstances shall the
employer pay the worker anything less than a two-week bonus.”

According to a recent U.S. State Department report, the abuses are so
brazen that at new job sites, companies often sign protection contracts
with union leaders before they hire a single worker.

Race to the bottom

Because they rob Mexican workers of leverage, protection unions depress
salaries which have been falling in real terms for the past 30 years,
De Buen said. This wage stagnation also hurts American workers by
encouraging U.S. factories to relocate south of the border and by
depressing Mexican demand for U.S. exports.

“When that happens, workers in both countries get screwed,” Dan
Kovalik, a top legal advisor for the United Steelworkers, told
GlobalPost.

As a result, Kovalik and other U.S. union activists, many of whom used to
view Mexican factory workers as the enemy for taking their jobs, are
now offering them support, advice and solidarity as they try to break
the stranglehold of protection unions.

For too long, multinationals “have been able to divide us by race,
border, language and political orientation, while increasing their
profits,” United Auto Workers President Bob King wrote last month in a
letter of support to Mexican workers who earn just $16.50 per day at a
Honda auto plant and are trying to form an independent union.

“As unionists, we have to figure out how to work together regardless of
our national identities,” King wrote. “Otherwise, we’re going to
continue competing in a race to the bottom.”

But forming democratic unions can be a long, demoralizing march.

Since the organizing drive began at Atento following the 2009
earthquake, the government labor board has presided over three elections
in which employers chose between the protection union and the
independent Telephone Workers Union. But all three votes were marred by irregularities.

In some cases, management refused to release workers from their jobs to
cast ballots. Others were blocked from entering voting booths by armed
guards or threatened with termination if they opted for the wrong union,
according to former Atento employees. Repeated requests by GlobalPost
for comment from Atento were ignored.

Today, Atento’s protection union remains in place while activists, like Vargas, have lost their jobs.

“They said it was for low productivity,” said Vargas, an intense
25-year-old who now makes a living selling soda and beer at soccer
games. “But everyone knows we were fired for trying to start a new
union.”

The perfect dictatorship

Mexico’s protection unions are the legacy of a political system that
Nobel Prize-winning novelist Mario Vargas Llosa once described as “the
perfect dictatorship.”

For most of the 20th century, Mexico was controlled by the
Institutional Revolutionary Party, or PRI. Though sometimes compared to
the old Soviet Communist Party, the PRI is credited with giving Mexico
the longest period of peace in the country’s history during a time when
other Latin American nations were wracked by labor upheaval, abusive
military regimes and guerrilla wars. Unions, it turns out, were key to
the PRI’s system of command and control.

Mexico’s largest confederation of workers, known as the CTM, was
founded in 1936 as part of the PRI and affiliates automatically became
party members. That allowed union bosses, like Fidel Velazquez who
headed the CTM for 56 years, to deliver thousands of votes to PRI
candidates.

In return, labor leaders received payoffs, political posts and other
perks. Working together with business owners and government officials,
union leaders would also keep their workers in line. Increases in wages
and benefits were small enough to mollify companies yet just large
enough to stave off worker revolts.

“It’s been said that Fidel Velazquez brought labor peace to Mexico,” De
Buen said. “But it’s like the Chicago mafia of the 1930s. It’s a
totally undemocratic system in which the last thing that matters is the
worker.”

The PRI finally lost power in the 2000 election but subsequent
administrations have maintained the unseemly triad between government,
business owners and labor leaders in the name of maintaining low wages
and global competitiveness.

“It doesn’t matter if it’s right-wing or left-wing, the government is an accomplice,” Xelhuantzi-Lopez said.

Mexican government officials did not respond to requests from
GlobalPost for comment. However, De Buen pointed out that in a 2010
response to a complaint filed before the UN-run International Labor
Organization, the government denied that protection unions and contracts
even exist.

But according to the latest U.S. State Department report on human rights,
protection unions are expanding in Mexico and now cover nearly all
public and private sectors of the economy. By contrast, the report noted
that “workers who sought to form independent unions risked losing their
jobs, as inadequate laws and poor enforcement generally failed to
protect them from retaliatory dismissals.”

One of the most brazen examples of a company leaning on a protection
union occurred this year at Arneses y Accesorios, which was once owned
by the U.S. aluminum firm Alcoa but was sold last year to PKC Group of
Finland.

Arneses y Accesorios, which is located in Ciudad Acuña on the
U.S.-Mexican border, produces wiring harnesses and components for
American. cars and trucks. Many of its 7,000 workers complained about
their $1.35-per-hour wages, dangerous chemical leaks and restrictions on
bathroom breaks. They wanted the National Miners and Metalworkers
Union, one of the few Mexican unions with a reputation for fighting hard
for worker rights, to represent them.

But after the union approached PKC about contract negotiations, company
executives quickly signed a protection contract with the CTM, the
workers confederation that critics contend serves as a stooge for
corporate interests. In a Jan. 31 message to employees at the plant,
Harri Suutari, PKC Group’s president and CEO, seemed to acknowledge that
the CTM had been brought in to serve the company, not the workers.

“In order to protect itself and jobs, the company has decided to sign a
collective agreement with the CTM,” Suutari said. “How much will the
union dues be? Nothing, because the company is going to pay them so that
the CTM does not enter the plants and has nothing to do with you.”

Winning while losing

Democratic unions can prevail over protection unions but examples can be counted on one hand.

That’s why labor activists often refer to a lengthy 2010 conflict at an
auto parts factory in the city of Puebla owned by Milwaukee-based
Johnson Controls, a Fortune 500 company with operations on six
continents.

The dispute began over bonuses. Under Mexican law, 10 percent of a
company’s annual profits must be shared equally among the labor force
but workers were offered just $5 each. That prompted a majority of the
workers signed affiliation cards with the Miners and Metalworkers Union
even though the company already had a deal with a protection union.

Soon afterward, 70 members of the protection union showed up outside
the factory in a show of force. Workers also faced trumped-up
accusations that they had kidnapped company executives. Still, employees
held firm and eventually announced a work stoppage.

Shutting down the assembly line for very long could have affected
deliveries to Mercedes-Benz, Nissan and other automakers and might have
led to major fines against Johnson Controls. As a result, the company
quickly recognized the Miners and Metalworkers Union and ended its
relationship with its protection union.

In the collective bargaining agreement that followed, workers who were
receiving minimum wage secured a 7.5 percent salary plus school aid
payments of about $50 per child and increased insurance coverage.

“It was a standout victory because it was so hard to do,” said Kovalic
of the United Steelworkers which provided support and advice Johnson
Controls workers. “And it’s especially significant for American workers
because it involved an American company.”

Although the union uprising in Puebla lifted the spirits of Mexico’s
democratic labor movement, many activists say it was an aberration in
what’s turning out to be a long and perhaps unwinnable campaign.

For example, Johnson Controls this month announced plans to close the
Puebla factory. Indeed, most attempts to fight back against protection
unions end with lots of workers receiving pink slips.

Vargas, who was fired by Atento for his activism, refuses to give up.
He is now a volunteer organizer for the independent Telephone Workers
Union and is trying to sign up his former Atento co-workers, one by one.

On a recent afternoon, Vargas stood outside one of Atento’s call
centers passing out leaflets detailing the low wages negotiated by the
company’s protection union. But with security guards keeping close
watch, most Atento workers hustled out the door at the end of their
shifts and hurried past Vargas without giving him a second glance.

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